The SECURE 2.0 Act of 2022 introduced a significant enhancement to catch-up contributions for retirement plan participants nearing retirement age. Beginning in 2025, participants aged 60 through 63 can make catch-up contributions that are substantially higher than the standard catch-up limit—up to $11,250, compared to the standard $7,500 for participants aged 50 and older. This "super catch-up" provision creates a meaningful planning opportunity for business owners and their employees, but it also introduces administrative complexity that plan sponsors must navigate.
How the Enhanced Catch-Up Works
Under current law, participants in 401(k), 403(b), and governmental 457(b) plans who are age 50 or older can make catch-up contributions above the standard elective deferral limit. For 2025, the standard deferral limit is $23,500, and the standard catch-up limit is $7,500, for a total of $31,000. SECURE 2.0 § 109 creates an additional tier: participants who are age 60, 61, 62, or 63 during the tax year can contribute up to $11,250 in catch-up contributions, for a total of $34,750.[1]
The enhanced catch-up is available only during the four-year window of ages 60 through 63. At age 64, the participant reverts to the standard $7,500 catch-up limit. This creates a limited planning window that business owners and highly compensated employees should maximize.
The Roth Catch-Up Requirement
SECURE 2.0 also introduced a requirement that all catch-up contributions by participants who earned more than $145,000 in FICA wages from the employer in the prior year must be designated as Roth contributions. This means the catch-up amount is contributed on an after-tax basis, with no current-year deduction, but grows and is distributed tax-free.[2]
The Roth catch-up requirement was originally effective for 2024, but the IRS issued Notice 2023-62 providing a two-year administrative transition period. The IRS subsequently issued proposed regulations providing further guidance. For 2025, plan sponsors should be prepared to implement the Roth catch-up requirement, as the transition period is ending and the IRS expects compliance.
For participants who earned $145,000 or less in the prior year, catch-up contributions can still be made on a pre-tax basis. The $145,000 threshold is indexed for inflation.
Plan Amendment Requirements
Plans that wish to offer the enhanced catch-up must be amended to reflect the new contribution limits. The IRS has set a general deadline for SECURE 2.0 plan amendments of December 31, 2026, for most plans. However, plans must operate in compliance with the new rules beginning in 2025, even if the formal amendment has not yet been adopted. This means plan administrators, recordkeepers, and payroll systems must be configured to accept the higher catch-up amounts and to properly designate Roth catch-up contributions for high-earners.[3]
Planning Considerations for Business Owners
Maximizing Contributions
For business owners aged 60 through 63, the enhanced catch-up provides an opportunity to shelter an additional $3,750 per year (the difference between $11,250 and $7,500) in tax-advantaged retirement savings. Over the four-year window, this amounts to $15,000 in additional contributions—plus investment growth. Combined with employer matching or profit-sharing contributions, the total annual contribution to a defined contribution plan can be substantial.
Coordination with Other Plans
Business owners who participate in multiple retirement plans (for example, a solo 401(k) for a consulting business and a 403(b) through an employer) must coordinate catch-up contributions across plans. The catch-up limit is an aggregate limit—the total catch-up contributions across all plans cannot exceed $11,250 for participants aged 60 through 63, regardless of how many plans they participate in.[4]
Roth vs. Pre-Tax Analysis
For high-earning participants who are required to make Roth catch-up contributions, the forced Roth treatment may actually be advantageous. If tax rates increase after 2025 (as they are scheduled to under the TCJA sunset), Roth contributions made in 2025 at lower rates will prove to be valuable in retirement. The Roth catch-up requirement, while initially viewed as a compliance burden, may prove to be a planning benefit for participants who would not have elected Roth treatment on their own.[5]
Business owners who are approaching or within the 60-63 age window should review their retirement plan provisions, coordinate with their plan administrator, and ensure that they are taking full advantage of the enhanced catch-up opportunity.